Committee investigates “winners and losers” under move to Universal Credit

26 February 2019

The Committee will hear from welfare and policy finance experts on the way in which most people currently claiming legacy benefits will move to Universal Credit. This is separate from the Department’s planned “managed migration” process — now due to start in earnest in 2020 rather than 2019, following the Government’s announcement that it plans to first run an initial pilot with 10,000 claimants this year.

The Joseph Rowntree Foundation estimates that, after 2018’s Budget changes, which included increases to the work allowance, UC is likely to reduce the number of people in working families in poverty by 300,000. However, it will also push 200,000 more people in out-of-work families into poverty. 5.5 million people in poverty should see increases to their income, the majority in working families, but 3 million people in poverty are set to see their incomes reduced, the majority also in working families. The Government has conceded that “some will be poorer” under Universal Credit. What is less clear is who will be affected and by how much: perhaps surprisingly, it will depend in part not on your household finances, but on the process by which you transfer to UC.

Committee yet to see how Government aims to transfer claimants

The Government has called the process of it transferring claimants on “old” or “legacy” benefits onto Universal Credit “managed migration”, although this has not begun yet and the Committee has yet to see clear information about when and how Government plans to do this. The Committee continues to push for DWP to set itself tests it will meet to prove itself ready to move to the wholesale transfer of clients, without placing them at risk of the hunger, hardship and homelessness that have accompanied the rollout of UC across the country:

That rollout completed late last year, which means no one can now make a new application for the old, “legacy” benefits. It also means that if there is any change in their circumstances that affects their benefit entitlement, claimants must make a whole new application for their entire benefit entitlement, under Universal Credit. The Government calls this “natural migration”. As the Committee has noted in a series of reports, there are many differences between the legacy system and Universal Credit: in the application process, in the way the benefit is paid, to whom and how often, and in the amounts people can claim for the different elements—whether it’s support finding work or more work, for the extra costs of disability, for children and childcare or for housing.

Evidence session will look at which groups are set to lose out

But while the Government’s plans for managed migration are set to include “transitional protection” – temporary support and extra payment to smooth the change and drop in income when you move to Universal Credit—no such support is on offer for people who undergo “natural migration”, despite the fact that they often face similar cuts to their budgets and payments.

This evidence session will look at which groups are set to lose out the most as a result of moving to Universal Credit and what the likely impact will be on claimants when this happens. Many claimants, who may have been receiving legacy benefits for many years, will not know anything about the differences of UC, what support or protection is on offer or would have been if they had been transferred in a different way, or even how much they will be budgeting with every month once they have reapplied. The Committee will look at what DWP is doing to make sure claimants set to lose out under UC do not transfer from their existing benefits before they need to, and whether the “triggers” for “natural migration”– the changes of circumstance that will force people to reapply for their benefits as Universal Credit - are the right ones.